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After the fall: A few thoughts on Borders and the future of bookselling

JA February 22

As you may have heard, last week it was announced that the REDgroup, who own Borders and Angus & Robertson, as well as Whitcoulls in New Zealand, had gone into voluntary administration. This followed the news that Borders in the US (which is owned by a separate company) had also collapsed.

Needless to say, the report brought about a flurry of comment – The Wheeler Centre have done a good round-up of the post-mortems here, and we’ve also wrapped up a few more thoughts on the situation below.

The whys and wherefores

The news that Borders was in trouble would not have come as a surprise to many – the rumours had been swarming for months – but the reasons for the chain’s fall still remain somewhat of a contested issue.

REDgroup chairman Steven Cain attempted to lay the blame at the feet of the government for failing to change the law on parallel importation (which state that foreign editions of a book may not be imported if Australian publishers release a local edition within the 30 day timeframe), and the ongoing barrier of the GST (namely that books imported from overseas are not liable for GST, and therefore can be sold at cheaper rates).

These claims, particularly the former, was eagerly echoed by Dymocks director Bob Carr:

This just shows the foolishness of protectionism – the government wanted to protect the book publishing industry … but it disadvantaged a great slab of jobs and businesses in the retail sector.

Other commentators, however, have been quick to point out the REDgroup’s poor strategising and bad stock management.

This from Richard Flanagan over at the Age:

A&R’s strategy was, I was told some years ago by one of their senior executives, to go to war with the publishers and win. They looked to retailers like Woolworths as their model, with their crushing of the suppliers and producers as the key to making more money.

And from Scribe’s Henry Rosenbloom:

… Borders/A&R in its REDgroup incarnation was a very badly run business, for which the owners, Pacific Equity Partners, a private-equity group, are responsible. PEP deliberately created a brutalist regime: they installed bovver-boy managers who alienated all their inherited knowledgeable staff (who left), made appalling decisions about stock selection and presentation, and tried to treat books like potatoes. They were focused on fluffing up the business so it could be floated, so all they seemed to care about was inventory control and their cash position.

… [S]everal times last year, the group was ‘on stop’ with major publishers — that is, the publishers refused to supply books to them because the group was in breach of its credit limits and trading terms. At other times, the group simply stopped re-ordering titles that were selling or ordering new-release titles that might have sold.

Anyone who’s been to Borders in recent times would be hard pressed to deny that they’ve dropped the ball. In its early days, the chain may have fulfilled the buyer’s wish of stocking every book imaginable, but this, in my experience anyway, was short lived. I can’t even count the number of times I ducked inside in search of a particular title only to find repeatedly that they didn’t stock it (or that they had woefully shelved it in some bizarre place), whilst over ordering on others.

In truth, the reasons for the fall are probably to do with a combination of several factors, including poorly thought-out, brutish tactics, sloppy buying, the rise of online bookselling and the digital market, the GST and the high Aussie dollar. Yet, criticisms aside, the news is still deeply sobering – especially given the potential for mass job cuts, and the flow-on effects for publishers and writers. Say what you will, but Borders and A&R were highly visible and, according to Flanagan, represented about 20% of Australian book retailing. So then, the next logical question is what this gap might mean for consumers, as well as the industry as a whole, in future?

Bookselling and the future

I’m not going to jump on the doomsday bandwagon and say that this is the beginning of the end for bricks-and-mortar bookshops – one because I doubt this will be the case, and two because I sincerely hope it won’t be. Voluntary administration does not necessarily mean that Borders or A&R will shut up shop. They may survive for some time yet in one form or another, cost-cutting here and there, closing less-profitable branches. But I do think that the industry is shifting, and that the way we conceive of retailers and their physical presence is changing for the long term.

I freely admit that this is largely guesswork, but there seems little point in shutting our eyes and hoping that we’ll make it to Point B intact. And, let’s face it, it never hurts to give the magic-8 ball a bit of a shake.

One prediction is that online bookselling, and ebooks, will swoop in to grab up more of the market share. I’ve blogged on the Book Depository and co before, so won’t go into great detail again, but it’s easy to see that they have the ability to do what Borders hoped to in terms of seemingly stocking every title under the sun, yet without many of the costs.

The second is of course that the independents might be able to reassert themselves. John Birmingham has written eloquently on the idea of a ‘renaissance [for] the independent bookshop sector’, who tend to provide a more ‘bespoke service, with a lot of hand selling of small print run high value books’. This is one crucial thing that neither Borders nor the online have managed yet to replicate: the browsing experience, or, to borrow shamelessly from Phill English, the curatorial experience. This is something that is constantly repeated in conversations about bookselling – consumers want the product, yes, but they also place a high value on the atmosphere, the ability to drift through the shelves and discover, at leisure, beautiful editions of books by great authors.

The more interesting question is, I think, whether someone will discover a model that makes the best of both worlds – a system that distributes and sells books cheaply and efficiently, while still retaining that all-important curatorial vision. Guy Rundle, blogging over at Crikey, has argued that this is only a matter of time;

… [T]he online shopping environment is still, in many ways, less user-friendly than real 3D browsing … But eventually and soon, they will crack it, and the existing way of working through lists and keywords to buy books (or kindle texts), will look incredibly creaky. For all sorts of products, a 3-D browsing environment will eventually be established.

 

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